Here its /etc/X11/xorg.conf.failsafe. Why is this? Please give an example of the contents of that file after adding this entry.
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MaxMay 13 '12 at 12:59

@max I've edited the post and added a link. AFAIK xorg.conf is not a must on Ubuntu any more. Although it was there on my laptop.
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amotzgMay 13 '12 at 13:15

@max Also, if this solution do solve your problem, to my opinion, the question should be marked a duplicate.
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amotzgMay 13 '12 at 13:17

I did that and its causing extreme flickering of the screen! And when I press the brightness keys, flickers even more with black bars.
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MaxMay 13 '12 at 13:43

Seems that this is not the solution for you, I guess our problems are different. How did you create the xorg.conf to add the option to? Did you copy from your xorg.conf.failsafe? The other options in the sample may not fit your configuration.
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amotzgMay 13 '12 at 14:45